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1 . ?calculate the cost per unit for each product using direct labor hours to assign all overhead costs. standard & deluxe 2 . calculate

1. ?calculate the cost per unit for each product using direct labor hours to assign all overhead costs. standard & deluxe

2.calculate activity rates. maintenance/engineering support/materials handling/set ups/purchasing/receiving/paying suppliers. per hour/move/setup/requistion/order/invoice.

3.cost per unit. standard & deluxe per unit

4. ?Compare these costs with those calculated using the unit-based method. Which cost is more accurate.

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Standard Model Deluxe Model Expected quantity Selling price Prime costs Machine hours Direct labor hours 30,000 $370 15,000 $700 $4.5 million $5.25 million 37,500 37,500 75,000 75,000 Engineering support (hours) 13,500 31,500 Receiving (orders processed) 3,000 4,500 Materials handling (number of moves) 15,000 45,000 Purchasing (number of requisitions) 750 1,500 Maintenance (hours used) 6,000 24,000 Paying suppliers (invoices processed) 3,750 3,750 Setting up batches (number of setups) 60 540 Additionally, the following overhead activity costs are reported: Maintenance $600,000 Engineering support 900,000 Materials handling 1,200,000 Setups 750,000 Purchasing 450,000 Receiving 300,000 Paying suppliers 300,000 $4,500,000 Required:

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